News

Interesting Investments: Private Servers

Last time on Interesting Investments, we looked at rare video games. We’ve also looked at massively multiplayer online games, better known as MMOs, and how you can make money off of in-game items, virtual gold, and even real estate. It’s time for another deep dive, into private video game servers.

Owning a Server

I would be remiss if I didn’t talk about how owning a server is an actual investment. While there are drawbacks to owning your owner server and acting as a host, such as having to check your own site for malware instead of having a professional server company manage everything, there are quite a few benefits. First off, having your own server can eliminate the monthly costs of renting a server. You have full and complete access to the server and can run it the way you want (or how your IT department wants, ideally).

You can even split the difference and have a co-located server, where you own the server, but you rent space from a server farm as a physical location for your server. While this means you have to travel for maintenance, it also means you have a bit more customer service. This option also lets you use an off-site document management system, protecting backups in case there is damage to your building.

Renting Space

But the key to it being a good investment is that you can sell unused server space. There are plenty of articles that detail how to go about renting out or even subleasing server space. Hosting other company’s websites isn’t a horrible proposition. Although you or your company will have to provide tech support, it’s an otherwise passive income source.

The interesting part, however, is that you can host more than just extra storage or a website. You could instead host entire video games.

Private Servers

Also called emulated servers, private servers are not the most legal of ventures. They often break end-user license agreements, and reverse engineering server code tends to be highly frowned upon in court. There’s an exception, sort of, that we’ll get to in a minute.

Private servers have been around since the days of 1997’s “Ultima Online.” They were very popular for Blizzard’s “World of Warcraft” (WoW), where rulesets could be altered so that characters gained levels much faster than in the actual game, all without needing to pay a subscription fee. Donations, of course, were always accepted.

One of the most (in)famous private WoW servers was the Nostalrius server, later renamed Elysium, and now known as Light’s Hope. The private server recently announced it would open a new server (having earlier been shut down by threats from Blizzard, thanks to the Digital Millennium Copyright Act (DMCA). Between it and its main rival, Kronos, there are thousands of players who are not paying Blizzard for playing WoW. The difference is that, often, private servers offer an earlier version of the game.

The original base game, referred to as “Vanilla WoW” lacks the multiple expansions that have been released over the years. Some players argue the game was better “back in the day.” So much so that, thanks to pressure from the private servers, Blizzard is creating a “WoW Classic” server to try and monetize the idea.

Resurrecting Games

While it’s definitely illegal to run private servers of games like WoW that are still running, the Librarian of Congress, in a move controversial with game developers, said the DMCA would allow for games no longer supported to be brought back to private servers. However, due to court battles still raging, it’s a legal gray area. If it’s a private server that isn’t monetized and not widely used, it might be legal. The key word here being “might,” of course.

In some cases, it could be the only way gamers will get to play their old games, and it can be a labor of love (and often frustration) for those trying to recreate servers. Games like “The Matrix Online,” “City of Heroes,” and “Star Wars: Galaxies” are no longer around officially. Although the original developers no longer host servers, they could, in theory, be brought back.

In the end, many private servers are like private clubs. You have to know where to go to find them, register, and hope that the server doesn’t secretly host malware. It’s much safer to rent out server space to Joe’s Window Washing website, but where’s the fun in that?

DISCLOSURE:
The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer